June 22, 2018
Tourism: China’s People Power Tool
China has an underappreciated foreign policy tool that it has used increasingly in recent years: tourism. When Beijing wants to punish countries that go against its foreign policy interests, it cuts off the flow of Chinese tourists. There is likely more in store, and it will be very hard to counter.
On April 10, 2012, Filipino and Chinese ships clashed over the disputed Scarborough Shoal in the South China Sea. Quickly, major Chinese tourism agencies suspended group travel to the Philippines. On May 10, the Chinese government suspended all travel to the country. By the end of May, Chinese arrivals into the Philippines were 54 percent lower compared to April. As late as January 2013, Chinese arrivals were still 42 percent lower than the prior year.
Since this trial-run, Beijing has gone after bigger targets with greater effect. In 2016, China targeted Taiwan following the election of President Tsai Ing-wen and her pro-independence Democratic Progressive Party. In 2017, it targeted South Korea after Seoul’s decision to deploy a U.S. anti-missile system that Beijing deemed threatening.
Cutting off tourism is a perfect tool for China, as it imposes real costs on targets. The tourism cuts cost South Korea up to $15.6 billion and 402,000 jobs. China already has the world’s highest spending on outbound tourism, and the numbers are expected to grow. The more Chinese tourists spend, the more damage Beijing will be able to impose in the future.
Cuts in Chinese tourism also cause political blowback for targeted governments. In Taiwan, more than 10,000 tourism workers took to the streets blaming Tsai for the decline in mainland Chinese business. Conversely, the blowback in China is small. Its tourists, after all, can simply head to different destinations.
Tourism cuts are also easy for Beijing to use. Chinese tourists are almost three times as likely to travel as part of package tours compared to other countries. This gives China far more control than it would have over individual travelers. It took almost no time for China to cut package tourism to South Korea. In January and February 2017, 130,000 Chinese tourists per month traveled to Korea through package tours. In March, the number was below 3,000, and averaged that for the rest of the year. While individual tourism also fell significantly, it was a more gradual process.
Read the Full Article at The Diplomat
More from CNAS
-
Taking Trump’s Tariffs Threats Seriously
Podcast
Join Emily and Geoff to catch up on a whole bunch of economic security news, including the ill fated Nippon Steel / U.S. Steel deal, new chips export controls, and TikTik’s ba...
By Emily Kilcrease & Geoffrey Gertz
-
How the Chip War Could Turn Under Trump
Commentary
If the new Trump administration wants to reset chip policy — and if it wants visible results within four years — it had better start soon....
By Chris Miller
-
Ziemba: China Could Impose Retaliatory Tariffs on U.S.
Video
If tariffs and costs continue to rise, it will not be great for oil demand within the US, that's according to Rachel Ziemba, Adjunct Senior Fellow at the Center for a New Amer...
By Rachel Ziemba
-
Trump’s Treasury and Commerce nominations + Nippon Steel’s bid for U.S. Steel
Podcast
Emily and Geoff react to the nominations of Scott Bessent for U.S. Treasury Secretary and Howard Lutnick for U.S. Commerce Secretary and overall point man for trade and tariff...
By Emily Kilcrease & Geoffrey Gertz
